January 4, 2021 – Well, that was quite a year! Last year was a year reminiscent of the opening of the old ABC’s Wide World of Sports
. The year started off nicely, and then we had the agony of defeat, complete with the stock market equivalent of the ski jumper flailing about while careening down the jump ramp, and then the year returned with the joy of victory by having a winning result. Depending upon the market average used, I can make a case for a slow year, a slightly better than normal year, or a great year.
It is common to make predictions. Over the rest of the month, we will be treated to various reckonings of the January barometer. As is common in this space, at a later date I will make some hay out of the offbeat predictors of the stock market, and how they fared in 2020.
Long time readers know I do not make predictions.
If I did, I don’t think any for 2020 would have been accurate.
There was a substantial weakening in the bullish percent indicators over the shortened week, despite the gains for the market averages. At this point it is nothing more than the usual movement of the market. I will continue with WEALTH ACCUMULATION strategies.
Remember, Xs mean OFFENSE or wealth accumulation, while Os mean DEFENSE, or wealth preservation.
On a general note:
Lost in much of the mayhem we saw last year was a change in IRA distribution laws that went into effect on January 1st 2020, and changed again in March 2020, and that temporary action expired on December 31, 2020.
First, for these who were born in 1950, you do NOT need to begin taking money out of your IRAs in 2021. You can wait until 2022 or later, depending upon the date you were born.
If you were born in 1949, AND DID NOT START YOUR REQUIRED DISTRIBUTIONS IN 2020, you can wait until age 72 ½. If you started taking them in 2020, you need to continue taking them.
For those born before 1949, you will be required to take IRA distributions again.
The tradeoff for this is the elimination of the stretch IRA for those who passed away in 2020.
In English, if you inherited an IRA before 2020, you can take distributions over your lifetime.
If you inherited an IRA in 2020, you very likely will need to liquidate the IRA balance within 10 years of the death of the decedent. I can provide further details in a conversation. This January 4 or any time, email me at email@example.com.